This paper analyses the business model on which genomics companies base their future value as a result of performing discovery programmes in collaboration with partner companies who then develop products from the knowledge generated. A model of the deal-flow and consequent cash requirements and generation of a company delivering discovery genomics or pharmacogenomics resources and technology in presented. It is demonstrates that on a net present value (NPV) basis, investing in target discovery using genomics is not as attractive as public valuations of the companies would suggest, and rarely provides Internal Rates of Return (IRR, the discount rate at which NPV is zero) greater than the NASDAQ composite average. A realistic model of a company performing only genomics target discovery has an IRR of around 12%; this is below the majority of established manufacturing company stocks. The business model is independent of technology details: exactly the same economics apply to proteomics, transcriptomics and other investment-intensive discovery technologies. It is concluded that venture capital (VC) investment in genomics will be driven by the likelihood of a rapid exit rather than the genuine underlying value of the company, and that private investors looking to build long-term value will increasingly look to other technologies as the problems of discovery technology companies become more apparent.